Bill Seeks to Drive Out Airbnb, Other Hotel Competition

We all know how the internet has changed our world. By change I also mean disrupted the functions of capitalism. What we are now calling “legacy” businesses instead of “brick and mortar,” like bookstores where we used to buy our books, have taken it in the shorts as we now purchase more of our books from the internet service called Amazon. But not just books. Amazon has become a favorite shopping service for anything we want and we don’t even have to get out of our PJ’s, if we wear them, to shop.

Taxi service used to be the domain of “taxi cabs” until an internet service called Uber decided to change how we “rent-our-ride” using non-taxi companies to carry us. All those legacy companies affected by the new internet services taking away their business (and therefore their money) have either fought them legally or have had to reshuffle what they do and how they do it to stay in business.

Government regulated businesses like taxi services that have heavy regulations on them, including nice fees government charges to protect them, have challenged services like Uber  trying to get excessive regulations imposed to run them out of competitive business, without much success.

Another service where we find this government protection being called on to stop an internet service that threatens are hotels and their fight with services like Airbnb and Homeaway/VBRO. What is Airbnb and their fellow internet services? For a long time I heard those names but didn’t understand them. Actually, it’s simple to understand. You have a home, you’re going to be away for a time, rather than leave it empty you rent it out. There have been years where my family went on a week, sometimes two weeks’ vacation and left our home empty while we were away. We could have used something like Airbnb to rent out our home and paid for our vacation from that.

It does get more complex from here. Not many of us have the kind of home someone would want to rent so most of us don’t do it. Not much of a challenge for hotels here. But, and here is where it gets complex, some people can afford to purchase a second home and traditionally they rent it out for long-term rental. I’ve not been able to purchase a home so I’ve been one of those long-term renters. But there are those who can afford a second home and now, because of services like Airbnb they short-term rent out their homes.

The hotel industry finds this a threat to them, a service that could potentially shut down hotels sending workers into unemployment. The hotel industry wants to get ahead of this before it becomes too big to stop, like happened for the most part with Uber and those other companies. Like taxi companies they are turning to government to protect them from the internet competition. The city in which I live has banned short-term rentals.

In looking at this issue, Romina Boccia writes this:

Short-term rental helps local communities by growing the number of tourists that visit the area. A recent study published by the National Bureau of Economic Research found that out of all Airbnb reservations, 42 to 63 percent would not have resulted in a hotel stay.”

“Despite the benefits to communities, short-term rental has come under increased scrutiny from state and local officials as it has expanded in both size and scope. Hotels and other legacy industries that see short-term rental as a threat to their market power have lobbied powerful legislators to impose strict requirements on platforms and their hosts.

In her article, “Maryland Bill Seeks to Drive Out Airbnb, Other Hotel Competition,” (which can be read HERE) reveals how Maryland and other states are trying to control the free-market with restrictions.

When you are through reading her article you’re left with this question: Is the role of government to control enterprise? Under socialism, yes. But under a Democratic Republic, no. If you want the United States of America to become fully socialistic, like is happening so much in the Socialist State of California, I’m afraid down the road you’re going to be in for a rude awakening. Socialism destroys more than free-market enterprise.